John R. Houk - Editor
The 9/11 Civil Litigation and the Justice Against Sponsors of Terrorism Act (JASTA)
April 18, 2016 at 8:02 AM
For lots of readers, I suspect Saturday’s front-page New York Times story by Mark Mazzetti was their first exposure to the ongoing efforts by 9/11 victims and their families to sue the government of Saudi Arabia and other entities in U.S. courts over their alleged role in providing financial support for the September 11 attacks. Indeed, allegations of Saudi involvement are also back in the public eye in connection with the possible declassification of 28 pages of the 9/11 Commission’s Final Report that supposedly deal with the role and responsibility of various senior Saudi officials.
In a nutshell, (1) the 9/11 plaintiffs’ claims–that the Saudi government and a wide range of other entities, including banks, provided material support to the perpetrators of the 9/11 attacks–have gone nowhere, thanks to a series of shifting (but now largely stabilized) court rulings concerning the Foreign Sovereign Immunities Act (FSIA) and the Anti-Terrorism Act (ATA); (2) Congress is now considering legislation–the Justice Against Sponsors of Terrorism Act (JASTA)–that would in effect overrule each of those holdings; and (3) the Obama administration is, as Mark’s story explains, aggressively lobbying against that legislation, out of fears over the potential diplomatic and economic consequences of U.S. court judgments against the Saudi government that could run into the billions of dollars, and concerns over reciprocity from foreign countries.
In this post, I aim to provide a more detailed explanation of the legal background against which JASTA is being considered–so folks can better understand exactly what courts have held to date, and why JASTA could be a big deal, albeit in a very narrow class of cases.
I. The FSIA and the Terrorist Attacks Litigation
The shifting litigation sands vis-a-vis Saudi Arabia date back to a pair of 2005 district court rulings (In re Terrorist Attacks I and II), which threw out claims against the Saudi government and other state-run entities on the basis of the FSIA’s “discretionary function” exception. That exception preserves the sovereign immunity of foreign states even over non-commercial torts (for which the FSIA otherwise allows suits) if the tort resulted from discretionary conduct on the part of a foreign sovereign (e.g., whether to provide financial support to particular entities with links to terrorist organizations).
On appeal, the Second Circuit affirmed in In re Terrorist Attacks III, albeit on different grounds: The Court of Appeals there held that a different FSIA provision, waiving the sovereign immunity of “state sponsors of terrorism,” was the exclusive means for seeking to hold a foreign sovereign liable for its involvement in acts of terrorism, and so the fact that the State Department had not designated Saudi Arabia a “state sponsor of terrorism” precluded liability under any of the FSIA’s other exceptions (including the non-commercial tort exception) for terrorism-related claims. The court also held that it lacked personal jurisdiction over many of the other defendants (a holding that the Second Circuit would expand upon in its April 2013 decision in Terrorist Attacks IV).
The plaintiffs in Terrorist Attacks III sought certiorari, at which point the Supreme Court called for the views of the Solicitor General. In its “CVSG” brief, the U.S. government recommended that the Court deny certiorari–albeit on an alternative ground from that relied upon by the Second Circuit: In then-Solicitor General Elena Kagan’s view, the FSIA could theoretically allow a foreign sovereign to be held liable for terrorism-related non-commercial torts even if it was not a state sponsor of terrorism, but only if, as the Supreme Court had already interpreted the non-commercial tort exception in Amerada Hess, the “entire tort” took place within the territorial United States (as opposed to the injury arising from the tort).
As the government argued, even taking the plaintiffs’ allegations as true, a material amount of the allegedly tortious conduct (including the alleged help in financing the 9/11 attacks) took place overseas. Thus, the government offered a far narrower (and less vulnerable) ground on which to defend the Second Circuit’s ruling–which may have had a lot to do with the Supreme Court’s subsequent denial of certiorari, which appeared to conclude (at least at the time) the Terrorist Attacks litigation.
Things would indeed have ended there, except that, in 2011, the Second Circuit overruled its holding in In re Terrorist Attacks III, concluding in a different case (Doe v. Bin Laden) that the exceptions to the FSIA for non-commercial torts and state sponsors of terrorism were wholly unrelated–and therefore provided independent grounds on which to hold foreign sovereigns liable in U.S. courts. In other words, under Doe, a foreign sovereign that is not a “state sponsor of terrorism” can still be held liable for terrorism-related conduct under the FSIA, so long as one of the other exceptions–including the non-commercial tort exception–applies.
The Doe ruling led the Terrorist Attacks plaintiffs to file a Rule 60(b) motion for relief from the judgment in their earlier case, which provoked its own round of litigation, culminating in the Second Circuit’s December 2013 ruling that the plaintiffs were entitled to relief from the earlier judgment, which sent the case back to the district court for (re-)litigation of the original merits. Finally, last September, the district court nevertheless granted Saudi Arabia’s renewed motion to dismiss based upon the FSIA–because, as the U.S. government had argued in its 2009 CVSG brief in Terrorist Attacks III, the “entire tort” did not take place within the territorial United States, and so the non-commercial tort exception did not abrogate Saudi Arabia’s sovereign immunity. That ruling itself is now being appealed to the Second Circuit–so the underlying litigation remains very much ongoing…
II. The Anti-Terrorism Act and Aiding-and-Abetting Liability
Although the effort to hold the Saudi Arabian government liable notwithstanding the FSIA has received most of the headlines, there have also been concerted efforts by the 9/11 families to hold private individuals and entities liable under the Anti-Terrorism Act–which creates civil remedies for U.S. nationals to obtain triple damages against those responsible for injuries arising out of “an act of international terrorism,” but, notoriously, does not specify the parties against which such liability may be pursued, or the theories upon which such liability may be predicated.
As relevant here, the biggest open question is whether the ATA allows theories of “secondary liability,” i.e., whether claims may be maintained against entities that were not directly responsible for the underlying act of international terrorism, but that somehow supported it (including by aiding and abetting the perpetrators). Both the Second and Seventh Circuits (the latter sitting en banc) have expressly held that the ATA does not allow claims based upon common law understandings of secondary (or accessory) liability, although the Seventh Circuit in Boim III nevertheless adopted an expansive theory of primary liability–what Judge Posner called “primary liability . . . [with] the character of secondary liability.” As he explained, “In addition to providing material support after the effective date of section 2339A, a donor to terrorism, to be liable under section 2333, must have known that the money would be used in preparation for or in carrying out the killing or attempted killing of, conspiring to kill, or inflicting bodily injury on, an American citizen abroad.” Indeed, the Seventh Circuit explained, such not-quite-secondary liability requires proof of intentional misconduct–a high (and potentially insurmountable) hurdle to holding banks, governments, and other entities liable on a theory that they did nothing more than provide material support to the perpetrators of the underlying acts.
And the Second Circuit subsequently held that the ATA also requires proximate causation, i.e., that the tortfeasor’s contribution be a “substantial factor in the sequence of responsible causation and whose injury was reasonably foreseeable or anticipated as a natural consequence.”
I don’t mean to get lost in the doctrinal weeds (which are, as should be clear, quite densely packed). The larger point is that these circuit-level decisions, together with the nature of the 9/11 attacks themselves, have made it difficult to use the ATA to impose any civil liability against those indirectly responsible for September 11.
Understanding this litigation background should help to put into perspective exactly what JASTA does. The bill passed the Senate but died in the House in the 113th Congress, and has, to date, only gotten out of the Senate Judiciary Committee in the 114th Congress. As relevant here, JASTA would work four material changes to existing law:
- It would amend the non-commercial tort exception to the FSIA to abrogate sovereign immunity in tort suits “in which money damages are sought against a foreign state arising out of physical injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of the office or employment of the official or employee (regardless of where the underlying tortious act or omission occurs), including any statutory or common law tort claim arising out of an act of extrajudicial killing, aircraft sabotage, hostage taking, terrorism, or the provision of material support or resources for such an act, or any claim for contribution or indemnity relating to a claim arising out of such an act.”
- It would amend the ATA to expressly allow aiding-and-abetting liability not in all cases, but in cases arising out of an act of international terrorism “committed, planned, or authorized” by a designated Foreign Terrorist Organization (FTO): “[L]iability may be asserted as to any person who aids and abets, by knowingly providing substantial assistance, or who conspires with the person who committed such an act of international terrorism.”
- It would amend the ATA to allow personal jurisdiction against such entities to the constitutional limit “for acts of international terrorism in which any national of the United States suffers injury in his or her person, property, or business by reason of such an act in violation of section 2333.”
- It would also amend the ATA to repeal the prohibition on suits against “a foreign state, an agency of a foreign state, or an officer or employee of a foreign state or an agency thereof acting within his or her official capacity or under color of legal authority.”
JASTA’s amendments to the FSIA and ATA would apply to any civil action “pending on, or commenced on or after, the date of enactment of this Act; and . . . arising out of an injury to a person, property, or business on or after September 11, 2001.” In other words, the new law would apply to some pending cases–all those in which the underlying injury took place on or after September 11. Claims arising before September 11 would, presumably, not be covered.
IV. Taking Stock
It is certainly Congress’s prerogative to expand the scope of statutory liability that it created in the first place. And it’s hard to argue that amending the Anti-Terrorism Act to allow aiding-and-abetting liability (and more expansive personal jurisdiction) against private entities raises foreign relations and diplomatic questions nearly as grave or fraught as those provoked by the FSIA amendment.
The much more sensitive part of JASTA is the FSIA amendment and the last ATA amendment–which could be especially powerful for tort claims against foreign sovereigns that (1) are not designated as state sponsors of terrorism; but (2) could nevertheless be held liable in tort for “extrajudicial killing, aircraft sabotage, hostage taking, terrorism, or the provision of material support or resources for” an act of international terrorism within the United States, even where much of the underlying tort occurred overseas. At least at the moment, that basically appears to be at most a class of one–to wit, Saudi Arabia, at least if the allegations in the pending lawsuits are true.
Although it’s easy to be sympathetic to the plaintiffs in the Terrorist Attacks litigation, as Mark explained in his Times article,
Obama administration officials counter that weakening the sovereign immunity provisions would put the American government, along with its citizens and corporations, in legal risk abroad because other nations might retaliate with their own legislation. Secretary of State John Kerry told a Senate panel in February that the bill, in its current form, would “expose the United States of America to lawsuits and take away our sovereign immunity and create a terrible precedent.”
Those reciprocity considerations, combined with the concerns about the United States’ diplomatic relations with Saudi Arabia and the potential economic consequences if, as a result of the bill, Saudi Arabia seeks to withdraw as many of its financial resources from U.S. territory as possible, are what potentially makes JASTA such a fraught proposition.
I don’t have a strong position on whether Congress should enact JASTA’s FSIA amendment or the last amendment to the ATA, largely because I’m not in a good position accurately to balance the ramifications of enacting JASTA against the unquestioned entitlement of the 9/11 victims and their families to appropriate legal relief, or to assess whether, if the FSIA and last ATA amendment were excised, JASTA’s amendments to the rest of the ATA would still go a sufficiently long way toward providing the 9/11 victims and their families with meaningful judicial redress. Moreover, I suspect reasonable minds will disagree about which of these compelling but competing considerations should receive greater weight. My hope, though, is that this post will at least help to illuminate what the legal obstacles to relief for the 9/11 families have been to date, what JASTA would do to eliminate them, and why, per Mark’s story in Saturday’s Times, it has proven so controversial.
Update (4/18/2016, 6:14 p.m. EDT): This post has been revised to clarify the effect of JASTA’s fourth provision–which would not create a new exception to liability for the U.S. government and its officers, but would rather excise the existing bar on liability for foreign states and their officers. Thanks to a careful reader for prompting this important clarification!
Saudis Warn US of Economic Retaliation Over 9/11 Bill
A bi-partisan bill has been proposed in Congress that would allow victims of terrorist attacks to sue foreign governments that are responsible.
April 19, 2016
Saudi Arabia has threatened economic retaliation if the U.S. passes pending legislation that would allow victims of terrorist attacks to sue foreign governments that are responsible.
The bipartisan bill, co-sponsored by Sen. Chuck Schumer, D-New York, and Sen. John Cornyn, R-Texas, would permit victims of 9/11 to sue the Saudis and other financial partners of terrorism. The Obama administration is vigorously trying to block the bill.
Saudi Arabia warned it will sell off hundreds of billions of dollars of American assets if the bill is passed. Delivering the message personally in Washington, Saudi Foreign Minister Adel al-Jubeir told Congress Saudi Arabia would sell $750 billion in treasury securities and other assets before they would be in jeopardy of being frozen by American courts.
Saudi Arabia denied involvement in the 9/11 attacks, however, the official U.S. government report on the attack contains 28 censored pages on the topic of “foreign support for the September 11 hijackers.” Investigators say these pages confirm the Saudi’s role in the 2001 attacks that claimed the lives of close to 3,000 people and injured more than 6,000.
For years, the Saudis have asked for the release of the censored pages, but the Bush administration said disclosure would damage the U.S.’ ability to gather intelligence on terrorists. The Obama administration also refused to release the redacted pages.
Fifteen of the 19 hijackers were from Saudi Arabia. Other evidence of Saudi involvement in the terrorist attacks includes information leaked from the censored pages including the documentation of a series of phone calls between one of the hijackers’ Saudi handlers in San Diego and the Saudi Embassy, and the transfer of $130,000 from then-Saudi Ambassador Prince Bandar’s family checking account to one of the hijacker’s handlers in San Diego.
Zacarias Moussaoui, the so-called “20th hijacker,” who was sent to prison for his role in the attacks said members of the Saudi royal family donated funds to al-Qaeda. He also said he personally met a Saudi diplomat in Washington to plot the assassination of the U.S. president using a surface-to air missile. The two discussed bombing the U.S. Embassy in London as well.
"The Saudis have known what they did in 9/11, and they knew that we knew what they did, at least at the highest levels of the U.S. government," said former Sen. Bob Graham, co-chair of the 9/11 congressional inquiry commission.
Families tried in the past to sue the Saudi government, but the cases were rejected due to a 1976 law granting foreign nations immunity from lawsuits in the American judicial system.
"I think part of the concern is that somehow this is a thumb in the eye to Saudi Arabia, a valuable ally," said Senate-sponsor Cornyn. "It's not open-ended and it's not targeted at Saudi Arabia."
Cornyn also dismissed the threats from Saudi Arabia. "It's seems overly defensive to me and I doubt they can do it," he said. "I don't think we should let foreign countries dictate the domestic policy of the United States."
Other analysts say it is unlikely the Saudis will follow through on their threats.
All of the presidential candidates support the bill, expect John Kasich, who has not commented on it to date.
IPT's Hoekstra: Public Deserves to See Full 2002 Congressional 9/11 Report
Relevant Radio 'The Drew Mariani Show'
April 19, 2016
[Blog Editor: To listen to the audio, you can either go to the IPT post or go to this podcast link: http://relevantradio.streamguys.us/DM%20Archive/DM20160418c.mp3]
Drew Mariani: Hey, when the planes slammed into the World Trade Center and the Pentagon back on 9/11, remember that, Osama bin Laden was revealed as the mastermind behind it. We knew at the time that there was an obvious Middle Eastern terrorism link. What we didn't know was what countries were involved and to what extent. We went into Afghanistan, well, because you know that's where bin Laden was holed up and why we sent troops into Afghanistan, and you know we didn't know about the rest. The most disturbing was that we didn't know that Saudi Arabia, where bin Laden was born and raised, could have played a role in this. You know Congress investigated the events surrounding 9/11; they came up with a 400-page report, and that was released to the public. And I should say most of it was released to the public. I think they held back about 28 pages and they're still labeled as classified. But what's contained on those pages is really fodder for a lot of conversation right now. It's suspected to contain information on Saudi Arabia's role on that fateful day. Right now Saudi Arabia has told the Obama administration and members of Congress that it's going to sell off hundreds-of-billions of dollars' worth of American assets, it will be a huge asset dump held by their kingdom, if Congress passes a bill that would allow the Saudi government basically to be held responsible in American courts for any role in September 11th in 2001, when those attacks took place. The Obama administration has lobbied Congress to block the bill, according to some officials. But the Saudi threats have been of course the subject now of intense discussion in recent weeks between both lawmakers and officials from the State Department and the Pentagon. And a number of officials have warned basically senators of diplomatic and economic fallout from you know any sort of legislation. So what's going to happen? And what is the truth behind all this? Joining me right now is Pete Hoekstra. He's the Shillman Senior Fellow with the Investigative Project on Terrorism, the former Chairman of the U.S. House Intelligence Committee, and former member of the House Committee on Education and the Workforce. And Peter, thank you for your time. It's good to have you back. I know you just came out with a book, I want to plug that for you too. It's called 'Architects of Disaster: The Destruction of Libya. It came out about four months ago, folks, you may want to check that out. And you can learn more about him at investigativeproject.org. This is a big story. How do you know how do we know Saudi Arabia is involved and you know what do you think's going to happen ultimately with you know Congress and possible legislation?
Pete Hoekstra: Well a couple of things, number one – I've been advocating for the last period of time that these 28 pages be made public, that if there need to be some redactions to protect sources, those redactions be made, but overall that the public 13 years after this report was completed, now almost 15 years after 9/11, you know they, the public deserves to see all of this information. And so it should move forward. In regards to the legislation that Senator Cruz is pushing, I'm not quite sure about a couple of things. I'm you know I'm not sure why we need to just highlight Saudi Arabia. Any country –
Hoekstra: – that is identified with terrorism should be able to be held accountable; I'm thinking of Iran, should be able to be held accountable. So just singling out Saudi, I'm not sure that that is appropriate. There's a number of countries that may in one form or another be somewhat supporters of terrorism against U.S. property, U.S. goods or U.S. persons. So let's make sure that they can be held accountable. I think that the action that Saudi Arabia is talking about, and they're not talking about disinvesting in the United States to punish the United States, the explanation that they're giving is – we've got to disinvest in the United States because if we actually become liable and the courts find for some defendants that we are liable and you know hold us accountable or hold a judgment against us for X-hundreds-of-millions or a billion dollars, at that point in time the U.S. courts may come and seize U.S. assets that we own. And so what we want to do is to protect ourselves. We're going to disinvest in the United States so that a U.S. court can't freeze any of our assets. Oh, I think their economy and our economy and their, the assets they hold in the United States are so significant that they could never actually pull that off, pull it off successfully. If they did they've have to do it at a fire sale.
Hoekstra: And they wouldn't want to do that.
Mariani: Yeah, I read earlier today that they would be forced to sell about 750-billion dollars in Treasury securities and other assets. Again, I want to go back to you know what would happen if this did take place. Let's take a worst-case scenario, say this is pushed and it goes through, what happens if the information is exposed and we find out Saudi Arabia had a, had something to do with 9/11?
Hoekstra: Well you know I've had access to those 28 pages. I think that this will, it will raise more questions than what it will answer. OK? I don't think that someone will read through there and they will find, or again, who knows – some people may read it and they will see a smoking gun, others will read it and they will see something different, but I think what it, you know my belief is that what it will show is that you know this is not classified or a secret or whatever, you know. The Saudis have for years been funding radical jihadism in the form of funding radical mosques, believers in Wahhabism, where much of this hatred and doctrine of jihadism comes from, and they've been funding these mosques around the world. And so you know many of us have called for them to stop the funding of these kinds of mosques for an extended period of time.
Mariani: And let me just ask you, because you've had access to those 28 pages, are there other nations in addition to Saudi Arabia? It's kind of the sense that I'm getting from you, it's not just Saudi Arabia, there may be other nations involved?
Hoekstra: No, I don't think if you go through there that you would see a litany of a number of different countries; I'm just saying from my experience with terrorism –
Hoekstra: – is that you know there are a number of countries that are involved in terrorism and, or you know certain state governments, you know everything from the Palestinian Authority –
Hoekstra: – to Iran, and these types of things, that you know any type of legislation like what Senator Cruz is proposing –
Hoekstra: – shouldn't be limited to just Saudi. That's two very different issues.
Mariani: And your mindset right now is that they should be released, the American public has a right to know.
Hoekstra: Yeah. And we ought to just make sure that, you know it's been 13 years since I've seen them, that if there is any sensitive information in there regarding sources or individuals that may have been the source of some of these information, make sure you redact that information. But other than that, let the information become public. It's been a long time.
Mariani: Yeah, great. Before I let you go, because I only have a minute or two left –
Mariani: – you just came out with a book too, 'Architects of Disaster: The Destruction of Libya.' I have not gotten the book or read it, but I would love to maybe have you back to talk about it. Fill me in, what was your book about?
Hoekstra: It's about what happened in Libya. We had a tremendous success story in Libya. [Muammar] Gaddafi after years of being on the outside, you know supporting terrorism against the United States and the West, culminating really with the take-down of Pan Am 103. In 2004, he gave up his nuclear weapons program, he gave, he paid reparations to the victims of his terrorist attacks, and he became a partner in fighting radical jihadism with the United States, a bipartisan success of a consistent policy for 20 years and finally Gaddafi changed sides.
Hoekstra: In 2011, Secretary of State Clinton and President Obama decided that Obama needed, or excuse me, that Gaddafi needed to go, they partnered with radical jihadists, and they were successful in getting rid of Gaddafi. And what we now have is you know for the last four years we've had a failed state. It's now part of the caliphate. It's exporting ideology, it's exporting fighters, and it's exporting weapons to Africa, to the Middle East and to Europe. It's been a disaster. It's, you know and for eight years there it was a rock of stability and certainty in northern Africa. And now it is the disaster of Libya, the destruction of Libya.
Mariani: Yeah, the book is called 'Architects of Disaster: The Destruction of Libya.' It's available at all major bookstores. And Pete, I want to thank you for your time. Thank you for your service to the country and for the insight you're able to offer. I always enjoy your, our conversations.
Hoekstra: Hey, thanks for the invite.
Mariani: Thank you.
Hoekstra: I enjoyed being with you.
Mariani: Check him out too, the website is investigateproject.org [sic], investigativeproject.org, great site to check out.
The 9/11 Civil Litigation and the Justice Against Sponsors of Terrorism Act (JASTA)
Saudis Warn US of Economic Retaliation Over 9/11 Bill
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IPT's Hoekstra: Public Deserves to See Full 2002 Congressional 9/11 Report